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It is a thing that people set up fraudulent companies using strangers addresses without authorisation. Companies House appear to say they are legally blocked from preventing this:

Thousands of households have had their addresses unknowingly used by crime gangs to register bogus companies, a BBC investigation has revealed.

BBC Radio 4's You and Yours found about 150,000 had been registered and in some streets, every home had been targeted.

A Companies House spokesman said there were currently "no legal powers to verify or validate" a firm's details.

[Companies House is] a register which was set up in 1844 to be a register of companies and it has absolutely zero mandate to do any checking on any of the information.

This does not seem like a new or unusual problem, and most organisations are not prevented from doing the sort of minimal validation that could prevent this, even if not required to. This has for a long time been implemented by sending mail to the provided address that requires a response. It seems this could have been implemented at any time since 1844 with no obvious technical or legal hurdles.

Is there any law that restricts Companies House requiring some sort of verification of address such as requiring a response to a letter on registration?

User65535
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1 Answers1

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See Section 14 of the Companies Act 2006:

If the registrar is satisfied that the requirements of this Act as to registration are complied with, he shall register the documents delivered to him.

The requirements are set out here. They are based on various documents being "delivered to" companies house, and various statements that those documents must contain. By way of Section 14 above, if documents containing those statements are delivered to Companies House, then it must unconditionally register the company.

We could form a counter-argument. One of the statements that must be on the application, under Section 9(5) is:

a statement of the intended address of the company's registered office, which must be an appropriate address within the meaning given by section 86(2)

The part in italics was only recently added to the Act, so it's possible that Companies House might take a different position going forward. The article you linked to is from before the change.

Section 86(2) defines an "appropriate address" as follows:

An address is an “appropriate address” if, in the ordinary course of events — (a) a document addressed to the company, and delivered there by hand or by post, would be expected to come to the attention of a person acting on behalf of the company [...]

Taking all of the above, if the application uses someone else's address then it won't be an appropriate address, the requirements for registration will not have been met, and Companies House could refuse registration. It's not clear to me however that this gives Companies House the right to verify the accuracy of the address.

Regardless of whether they have the right to investigate, they certainly don't have the obligation. That's because of Section 13:

(1)The statement of compliance required to be delivered to the registrar is a statement that the requirements of this Act as to registration have been complied with.

(2)The registrar may accept the statement of compliance as sufficient evidence of compliance.

The UK has a reputation for being a "business friendly" jurisdiction where there is relatively little red tape or expense involved in setting up a company. A big part of that is that the process of registration is straightforward, both for the new company and Companies House; it's essentially automated in most cases. This in turn enables Companies House to keep their fees extremely low. Prior to 1 May 2024, it only cost £12 to register a company. Even now it only costs £50. Those kinds of costs might be very difficult to maintain if Companies House had to take manual steps to verify information on each application it receives. I suspect this is the (non-legal) reason why they haven't implemented such a policy so far.

JBentley
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